Planning for Long-Term Care (Part 5)
The Veteran’s Aid and Attendance Pension Benefit
The best advice that I can give you when planning for long-term care is not to delay. We never know what the future holds. While we are able, we must prepare for a variety of situations, and so it is imperative not just to plan for long-term care, but to plan properly.
Part 1 of this five part series began showing why establishing a good Long-Term Care Plan is a necessary and urgent matter. Part 2 outlined the three most essential documents found in a good Long-Term Care Plan and Part 3 explained how long-term care insurance might enhance that plan. The last installment, Part 4, discussed how a trust that is unique to our firm, the Living Trust PlusTM Asset Protection Trust, can protect your assets from the hassles and expenses of probate PLUS the expenses of long-term care. The Living Trust PlusTM is the only type of self-settled asset protection trust that allows a settlor to retain an interest in the trust while also protecting the assets from being counted according to state Medicaid laws. What I have just described is the single most prominent feature of the Living Trust PlusTM and it is also what makes this type of trust be the preferred form of asset protection for most people.
The final installment of this series will now discuss an under-utilized, special monthly pension benefit available to wartime veterans and surviving spouses of deceased wartime veterans who are incapable of self-support and in need of regular personal assistance.
Who Is Eligible for the Veteran’s Aid and Attendance Pension Benefit?
To receive the Veteran’s Special Pension Benefit for Aid & Attendance, a veteran must have served on active duty, at least 90 days, at least one day of which occurred during a period designated as wartime.
Periods Designated As Wartime:
- World War II — December 7, 1941 through December 31, 1946
- Korean Conflict — June 27, 1950 through January 31, 1955
- Vietnam Era — August 5, 1964 through May 7, 1975; for veterans who served “in country” before August 5, 1964, February 28, 1961 through May 7, 1975
- Gulf War — August 2, 1990 through a date to be set by law or Presidential Proclamation
There must have been a not dishonorable discharge. If younger than 65, the veteran must be totally disabled. If age 65 and older, there is no requirement to prove disability. However, the veteran or spouse must be in need of regular aid and attendance due to: inability of claimant to dress or undress, or to keep clean and presentable; frequent need of adjustment of any special prosthetic or orthopedic appliances which by reason of the particular disability cannot be done without aid (this will not include the adjustment of appliances which normal persons would be unable to adjust without aid, such as supports, belts, lacing at the back etc.); inability to eat due to loss of coordination of upper extremities or through extreme weakness; inability to attend to the wants of nature; or incapacity, physical or mental, which requires care or assistance on a regular basis to protect the claimant from hazards or dangers incident to his or her daily environment.
Not all of the disabling conditions in the list above are required to exist. It is only necessary that the evidence establish that the veteran or spouse needs “regular” (scheduled and ongoing) aid and attendance from someone else, not that there be a 24-hour need.
Determinations of a need for the aid and attendance is based on medical reports and findings by private physicians or from hospital facilities.
What Is the Amount of the Aid and Attendance Benefit?
Effective December 1, 2011, the Veterans A&A Pension can provide:
$20,447 per year (~$1,704 per month) for a qualified veteran;
$24,239 per year (~$2,020 per month ) if the veteran is married;
$13,138 per year (~$1,095 per month ) for a surviving spouse of a qualified veteran;
$31,578 per year (~$2,631 per month ) if both spouses are qualified veterans.
Is Aid and Attendance Only For Low Income Veterans?
No, and this is the primary reason that this benefit is so widely misunderstood. If you speak to a Veterans Service Representative in a regional VA office and ask them about the Veterans Aid and Attendance benefit, they will typically ask for your household income. When you tell them your household income, they will compare it to a chart and most often tell you that you earn too much income to receive the benefit. While the information they provide may be technically accurate, what they typically don’t explain is the “income” for Veterans Administration purposes (sometimes called IVAP or “adjusted income”) is actually your household income minus your recurring, unreimbursed medical and long-term care expenses. These allowable, annualized medical expenses are such things as health insurance premiums, home care expenses, the cost of paying a family member or other person to provide care, the cost of adult day care, the cost of an assisted living facility, or the cost of a nursing home.
To be able to receive the Veterans Pension with Aid and Attendance benefit, the veteran household cannot have adjusted income (i.e., household income minus unreimbursed medical expenses) exceeding the Maximum Allowable Pension Rate — MAPR — for that veteran’s Pension income category. If the adjusted income exceeds MAPR, there is no benefit. If adjusted income is less than the MAPR, the veteran receives a Pension income that is equal to the difference between MAPR and the household income adjusted for unreimbursed medical expenses. The Pension income is calculated based on 12 months of future household income, but paid monthly.
How is the Aid and Attendance Benefit Calculated?
The monthly award is based on VA totaling 12 months of estimated future income and subtracting from that 12 months of estimated future recurring, unreimbursed medical expenses. Allowable medical expenses are reduced by a deductible to produce an adjusted medical expense which in turn is subtracted from the estimated 12 months of future income.
The new income derived from subtracting adjusted medical expenses from income is called “countable” income or IVAP (Income for Veterans Affairs Purposes). This countable income is then subtracted from the Maximum Allowable Pension Rate — MAPR — and that result is divided by 12 to determine the monthly income Pension award. This cash benefit is paid in addition to the family income that already exists.
Filing a Claim
Filing a claim for the Veterans Aid and Attendance Pension Benefit is complex and time-consuming. If you want to do it correctly, it’s important to get qualified assistance. Just knowing which form to fill out and how to complete it is a complex endeavor in itself. Even if the proper form is completed, failure to check a single box may result in a complete denial of your claim.
The application process involves: obtaining evidence of prospective, recurring medical expenses; appointments for VA powers of attorney and fiduciaries; and a thorough understanding of the application process. Often, qualification for this benefit involves reallocation of assets and shifting of income in order to qualify, and these re-allocations may have significant impact on Medicaid eligibility.
Given that many veterans who need the Aid and Attendance Benefit will eventually wind up also needing Medicaid, this process should not be attempted without the help of a qualified elder law attorney who thoroughly understands both the Veterans Aid and Attendance Benefit and the Medicaid program, as well as the interaction between these two benefit programs.
We assist Level 4 clients of our firm, at no charge, in completing the required paperwork.
Evan H. Farr is an Accredited Attorney with the U.S. Dept. of Veterans Affairs, and the Farr Law Firm is an Elder Law and Estate Planning Firm that helps Veterans and their spouses obtain the financial assistance to which they are entitled. If you are a Veteran or spouse of a Veteran and you need assistance in your home, or are living in or considering moving into an Assisted Living Facility or Continuing Care Retirement Community, please contact us to see if you might qualify for the Veterans Aid and Attendance Special Pension Benefit. Call us today and take the first step towards gaining the peace of mind that comes with a good Long-Term Care Plan.